DOCSLIB.ORG

China's Economy Today and the Challenges It Faces in Shifting To

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
China's Economy Today and the Challenges It Faces in Shifting To Session I Can China Maintain Domestic Stability? What Will Be Its Likely Behavior in the Future? China’s Economy Today and the Challenges It Faces in Shifting to Capitalism Kwan Chi Hung 1. Introduction Ever since China began focusing on domestic reforms and open door policies at the end of the 1970s, it has been achieving an annual average growth rate as high as 9.7%. This growth is not the result of China strictly adhering to the principles of socialism, but conversely because the country has abandoned such principles. It is no exaggeration to say that, as reflected by the growth of private companies and the progress made in privatizing state-owned companies, China has already reached a stage where “it is no longer socialist.” The Chinese government officially describes China’s economy today as being in “the primary stage of socialism.” Since both proletariat and bourgeoisie have been created at the same time, the economy comes closer to the early stage of capitalism; that is, “the stage of primitive capitalism.” There is no doubt that the country’s goal is not an advanced stage of socialism, but a mature (or advanced) stage of capitalism. In fact, the “overall moderately prosperous society” set by the Chinese government as the target of economic development is common to a mature form of capitalism in that it presupposes not only a market economy and private ownership, but also the rule of law instead of rule of men, democracy rather than dictatorship, and systems for correcting the disparities between rich and poor through a redistribution of income. Neglecting to build such institutions might cause China to fall into the trap of crony capitalism. If China shifts from one-party dictatorship by the Communist Party to a more democratic political system, unification with Taiwan will become a reality. Moreover, by using its advantage as a latecomer, the country is projected to continue enjoying higher growth than advanced countries for a prolonged period to come. Considering the strong likelihood of the yuan (renminbi) rising in value in the future against major currencies in line with the rising international competitiveness of Chinese products (just like the yen since the 1970s), China is likely to replace the USA as the world’s biggest economic power before 2050 in terms of gross domestic product (GDP). 21 Kwan Chi Hung 2. From socialism to capitalism In 1978, the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party proposed efforts toward modernization by introducing reforms and open door policies under the leadership of Deng Xiaoping. Since then, more than a quarter of a century has passed. In the meantime, China has maintained its socialist cover, while pushing forward with capitalism. As reflected by the fact that private companies have assumed a leading economic role in place of state-owned companies, the economic realities have increasingly drifted farther away from the authentic principles of socialism. To justify the Communist Party’s one-party rule, new interpretations have been invented to match the circumstances of the times and whenever a new direction for reform was drawn up. Judging from the segmentation of its people into bourgeoisie and proletariat, China should be understood as being not in “the primary stage of socialism” but in “the stage of primitive capitalism.” (1) Whither Socialism? Traditional socialism is based on the three pillars of “income distribution in accordance with labor,” “resource allocation based on planning” and “public ownership centering on state-owned enterprises.” This runs counter to the characteristics of capitalism, which are “income distribution in accordance with production factors such as capital,” “resource allocation based on market principles” and “private ownership.” Unlike Russia, China did not opt to undertake shock therapy and shift to capitalism in a short period of time, but rather decided to take the path of gradual reform, switching the three pillars of socialism with those of capitalism one by one. First, between 1978 and 1992, the government implemented reforms that redistributed authority and profits to lower-level governments and companies. From 1993, it embarked on the introduction of the market mechanism, and the country has now entered the stage of ownership reforms centering upon privatization. During the first stage of reforms between 1978 and 1992, the principle of income distribution in accordance with labor was gradually abandoned. In the agricultural sector, people’s communes were disbanded and a contract system based on household units was introduced. Meanwhile, on the industrial front, authorities began to condone the pursuit of profit. The Chinese economy was invigorated as each economic entity began to pursue profit for its own sake. However, at this stage, state-owned enterprises and economic planning were still the leading players of the Chinese economy, and market forces, not to mention private ownership of property, were only tolerated as necessary evils. After Deng Xiaoping’s speech during his tour of southern China in 1992, the formation 22 China’s Economy Today and the Challenges It Faces in Shifting to Capitalism of socialist market economics was designated as a national goal at the 14th National Congress of the Chinese Communist Party held in the same year. Under a market-oriented environment, privately-owned firms grew rapidly, but many state-owned enterprises became unable to bear the intensifying competition, and their operations are continuing to slide. The problem of nonperforming loans at state-owned banks which extended loans to these firms was also worsening. The low efficiency of state-owned companies is common to all countries, and China is no exception. In fact, since the reforms and open door policies were instituted, economic growth tends to be lower in regions having a higher share of state-owned companies (see Figure 1). For instance, the three Northeastern Provinces (of Heilongjiang, Jilin, and Liaoning) have higher shares of state-owned companies than other regions, and thus fall short of the national average in terms of economic growth. In contrast, Guangdong province (home to many foreign-owned enterprises) and Zheijiang province (where private companies are becoming active) are the fastest growing provinces in China. Fig. 1 Growth in GDP of selected provinces in inverse proportion to the percentage of state-owned companies (%) 16 浙江Zheijiang Guangdong広東 14 吉林Jilin 12 10 8 Liaoning遼寧 6 Heilongjiang黒龍江 4 GDP平均成長率(1979-2003年) 2 GDP average growth average growth GDP (1979-2003) 0 0 20406080100(%) Percentage工業生産に占める国有企業の割合（2003年） of state-owned companies in industrial production (2003) Source: Compiled based on respective year editions of the Chinese Statistics Yearbook As it became clear that the red ink at state-owned enterprises and the nonperforming loans would in the end become a burden on government finances and that private companies were far better than state-owned enterprises in terms of productivity and earnings, the 23 Kwan Chi Hung authorities could not help but condone privatization. The privatization process that began with small and medium-sized firms spread to large companies under the principle of “the strategic realignment of the state-owned economy” presented at the 15th Party Congress of 1997. In order to accelerate privatization, under the “Decision on Issues Regarding the Improvement of the Socialist Market Economic System” adopted at the Third Plenary Session of the 16th Central Committee in October 2003, it was decided that public ownership through a shareholding system should take the place of state-owned enterprises as the mainstay of the economy. “Shareholding” in this sense signifies a mixed ownership that absorbs state-owned capital, collective capital and private capital. Depending on the circumstances, the role of state-owned capital in these shareholding firms may take the form of absolute shareholding or relative shareholding. As a result of this breaking away from traditional ideology, we are likely to see more capital participation in state-owned enterprises by foreign companies and private companies. While the “Decision” still maintains the wording “keeping public ownership as the mainstay of the economy,” by expanding the definition of public ownership, the leaders have kept the pretext of socialism intact while embracing the substance of capitalism. Depending on interpretation, the shareholding system, which has been given the status of main form of public ownership, can include purely private firms such as the publicly-listed companies in capitalist countries. If the traditional definition is followed, it is not an exaggeration to say that China is no longer in a stage of socialism. However, under the new definition, one could even go so far as to say that not only China but capitalist countries such as the United States and Japan are also socialist nations that maintain “public ownership as the mainstay” of their economies. As if to signify the spread of capitalism, China now consists of various classes. “A Study Report on the Stratums of Chinese Society Today” compiled by the Institute of Sociology of the Chinese Academy of Social Sciences (edited by Lu Xueyi, Social Sciences Literature Publishing, 2002) covered a series of analyses conducted based on the ownership status of “organizational resources (political resources), economic resources, and cultural resources,” and concluded that Chinese society consists of ten social strata and five social rankings. The ten social strata are classified as: (1) state and social leaders (2.1% of the total), (2) high and middle corporate executives (1.5%), (3) private entrepreneurs (0.6%), (4) technical professionals (5.1%), (5) clerical workers (4.8%), (6) private business owners (4.2%), (7) tertiary industry workers (12.0%), (8) industrial workers (22.6%), (9) farmers (44.0%), and (10) unemployed or partially employed people (3.1%). The five social rankings are referred to as the top, medium top, medium middle, medium lower, and bottom layers.
Load more

Recommended publications
  • Chinese Privatization: Between Plan and Market
    CHINESE PRIVATIZATION: BETWEEN PLAN AND MARKET LAN CAO* I INTRODUCTION Since 1978, when China adopted its open-door policy and allowed its economy to be exposed to the international market, it has adhered to what Deng Xiaoping called "socialism with Chinese characteristics."1 As a result, it has produced an economy with one of the most rapid growth rates in the world by steadfastly embarking on a developmental strategy of gradual, market-oriented measures while simultaneously remaining nominally socialistic. As I discuss in this article, this strategy of reformthe mere adoption of a market economy while retaining a socialist ownership baseshould similarly be characterized as "privatization with Chinese characteristics,"2 even though it departs markedly from the more orthodox strategy most commonly associated with the term "privatization," at least as that term has been conventionally understood in the context of emerging market or transitional economies. The Russian experience of privatization, for example, represents the more dominant and more favored approach to privatizationcertainly from the point of view of the West and its advisersand is characterized by immediate privatization of the state sector, including the swift and unequivocal transfer of assets from the publicly owned state enterprises to private hands. On the other hand, "privatization with Chinese characteristics" emphasizes not the immediate privatization of the state sector but rather the retention of the state sector with the Copyright © 2001 by Lan Cao This article is also available at http://www.law.duke.edu/journals/63LCPCao. * Professor of Law, College of William and Mary Marshall-Wythe School of Law. At the time the article was written, the author was Professor of Law at Brooklyn Law School.
    [Show full text]
  • 'New Era' Should Have Ended US Debate on Beijing's Ambitions
    Testimony before the U.S.-China Economic and Security Review Commission Hearing on “A ‘China Model?’ Beijing’s Promotion of Alternative Global Norms and Standards” March 13, 2020 “How Xi Jinping’s ‘New Era’ Should Have Ended U.S. Debate on Beijing’s Ambitions” Daniel Tobin Faculty Member, China Studies, National Intelligence University and Senior Associate (Non-resident), Freeman Chair in China Studies, Center for Strategic and International Studies Senator Talent, Senator Goodwin, Honorable Commissioners, thank you for inviting me to testify on China’s promotion of alternative global norms and standards. I am grateful for the opportunity to submit the following statement for the record. Since I teach at National Intelligence University (NIU) which is part of the Department of Defense (DoD), I need to begin by making clear that all statements of fact and opinion below are wholly my own and do not represent the views of NIU, DoD, any of its components, or of the U.S. government. You have asked me to discuss whether China seeks an alternative global order, what that order would look like and aim to achieve, how Beijing sees its future role as differing from the role the United States enjoys today, and also to address the parts played respectively by the Party’s ideology and by its invocation of “Chinese culture” when talking about its ambitions to lead the reform of global governance.1 I want to approach these questions by dissecting the meaning of the “new era for socialism with Chinese characteristics” Xi Jinping proclaimed at the Communist Party of China’s 19th National Congress (afterwards “19th Party Congress”) in October 2017.
    [Show full text]
  • Contemporary China: a Book List
    PRINCETON UNIVERSITY: Woodrow Wilson School, Politics Department, East Asian Studies Program CONTEMPORARY CHINA: A BOOK LIST by Lubna Malik and Lynn White Winter 2007-2008 Edition This list is available on the web at: http://www.princeton.edu/~lynn/chinabib.pdf which can be viewed and printed with an Adobe Acrobat Reader. Variation of font sizes may cause pagination to differ slightly in the web and paper editions. No list of books can be totally up-to-date. Please surf to find further items. Also consult http://www.princeton.edu/~lynn/chinawebs.doc for clicable URLs. This list of items in English has several purposes: --to help advise students' course essays, junior papers, policy workshops, and senior theses about contemporary China; --to supplement the required reading lists of courses on "Chinese Development" and "Chinese Politics," for which students may find books to review in this list; --to provide graduate students with a list that may suggest books for paper topics and may slightly help their study for exams in Chinese politics; a few of the compiler's favorite books are starred on the list, but not much should be made of this because such books may be old or the subjects may not meet present interests; --to supplement a bibliography of all Asian serials in the Princeton Libraries that was compiled long ago by Frances Chen and Maureen Donovan; many of these are now available on the web,e.g., from “J-Stor”; --to suggest to book selectors in the Princeton libraries items that are suitable for acquisition; to provide a computerized list on which researchers can search for keywords of interests; and to provide a resource that many teachers at various other universities have also used.
    [Show full text]
  • "Functional Socialism'' and "Functional Capitalism" : the "Socialist Market Economy" in China
    "Functional Socialism'' and "Functional Capitalism" : The "Socialist Market Economy" in China 著者 Takeshita Koshi journal or Kansai University review of economics publication title volume 18 page range 1-25 year 2016-03 URL http://hdl.handle.net/10112/00017203 Kansai University Review of Economics No.18 (March 2016), pp.1-25 ^Tunctional Socialism'' and ^Tunctional Capitalism — The "Socialist Market Economy" in China — Koshi Takeshita Based on a framework that conceives of ownership (property rights) as "a bundle of rights," We propose four types of ownership system, build concept models of "functional socialism" and "func tional capitalism," and then try to clarify the reality of Chinas "socialist market economy" We reached the following conclusions. First, we schematize the correspondence between "functional socialism" and "functional capi talism." Second, we show that a process of land ownership reform and state-owned enterprises reform corresponded with a schema of "functional capitalism." Third, we found that the ownership structure of the "socialist market economy" in China is now sepa rated into three different sets of rights regarding ownership (prop erty rights). Finally, we show that the reality of the "socialist market economy" is not a free market, but a market controlled by the Communist Party. Keywords: market socialism, state capitalism, property rights approach, land owner ship reform, reform of SOEs (state-owned enterprises) 1. Introduction: analytical viewpoint^^ Following the remarkable rise of Chinas economy, there has been an increase in discussion about the diverse forms that capitalism can take.^^However, when one considers that China calls its own system a "socialist market economy," one may wonder if it is better to think about the multiple forms that socialism can take.
    [Show full text]
  • April 14, 2005 Dr. Richard Baum Director, UCLA Center for Chinese Studies Before the U.S.-China Economic and Security Review Commission
    April 14, 2005 Dr. Richard Baum Director, UCLA Center for Chinese Studies Before the U.S.-China Economic and Security Review Commission China's State Control Mechanisms and Methods Chairman D’Amato, Ladies and Gentlemen of the Commission: China is in the midst of an unprecedented societal transition. Triggered by powerful twin engines of change -- marketization and globalization -- the country’s socio-economic landscape has been altered profoundly and irreversibly over the past quarter-century. For most of China’s 1.3 billion people, the changes have brought new (if unevenly distributed) opportunities for self-betterment and freedom of personal choice, along with new risks of personal failure. This profound seismic shift in China’s socio-economic landscape has not been matched by equally profound changes in the country’s dominant political institutions and processes. With their deeply engrained commitment to a monocratic Leninist political order, China’s leaders have struggled mightily to resist – or at least to contain and control -- the inherently pluralizing forces of marketization and globalization. The result has been a build-up of tensions between a complex, vibrant society and a rigid, monochromatic party- state. Not all the political political news is dim and dreary, however. There are at work in China today transformative forces that are slowly altering the country’s underlying political dynamics -- even as its leaders try to redirect and channel these forces from above. In the cracks of the monolithic Chinese party-state there are growing the first visible sprouts of a frail but genuine civil society. The net result is a complex and multi-layered political reality, not easily captured in conventional “either/or” dichotomies.
    [Show full text]
  • 1How Do We Compare Economies?
    1 How Do We Compare Economies? As mankind approaches the end of the millennium, the twin crises of authoritarianism and socialist central planning have left only one competitor standing in the ring as an ideology of potentially uni- versal validity: liberal democracy, the doctrine of individual freedom and popular sovereignty. In its economic manifestation, liberalism is the recognition of the right of free economic activity and economic exchange based on private property and markets. —Francis Fukuyama, The End of History and the Last Man, 1992 INTRODUCTION We have witnessed a profound transformation of the world political and economic order since 1989, the ultimate outcome of which is difficult to foresee. The former Soviet Union (FSU)1 broke up, its empire of satellite states dissolved, and most of the former constituent parts are trying to fulfill Fukyama’s prophecy quoted above. In his view, the end of the Cold War means the convergence of the entire world on the American model of political econ- omy and the end of any significant competition between alternative forms of political or economic systems. Has this prophecy come true? We think not. Certainly during the second half of the 1990s, the economic boom in the United States pushed it forward as a role model that many coun- tries sought and still seek to emulate. But with the outbreak of financial crises in many parts of the globe and the bursting of the American stock market bubble in March 2000, its eco- nomic problems such as continuing poverty and inequality loom large. Furthermore, it is now clear that the problems in the FSU are deeply rooted, with the transitions in various former Soviet republics stalled.
    [Show full text]
  • Socialist Planning
    Socialist Planning Socialist planning played an enormous role in the economic and political history of the twentieth century. Beginning in the USSR it spread round the world. It influenced economic institutions and economic policy in countries as varied as Bulgaria, USA, China, Japan, India, Poland and France. How did it work? What were its weaknesses and strengths? What is its legacy for the twenty-first century? Now in its third edition, this textbook is fully updated to cover the findings of the period since the collapse of the USSR. It provides an overview of socialist planning, explains the underlying theory and its limitations, looks at its implementation in various sectors of the economy, and places developments in their historical context. A new chap- ter analyses how planning worked in the defence–industry complex. This book is an ideal text for undergraduate and graduate students taking courses in comparative economic systems and twentieth-century economic history. michael ellman is Emeritus Professor in the Faculty of Economics and Business, University of Amsterdam, Netherlands. He is the author, co- author and editor of numerous books and articles on the Soviet and Russian economies, on transition economics, and on Soviet economic and political history. In 1998, he was awarded the Kondratieff prize for his ‘contributions to the development of the social sciences’. Downloaded from Cambridge Books Online by IP 128.122.253.212 on Sat Jan 10 18:08:28 GMT 2015. http://ebooks.cambridge.org/ebook.jsf?bid=CBO9781139871341 Cambridge Books Online © Cambridge University Press, 2015 Downloaded from Cambridge Books Online by IP 128.122.253.212 on Sat Jan 10 18:08:28 GMT 2015.
    [Show full text]
  • HU Jintao Hú Jǐntāo ​胡锦涛 B
    ◀ HU Die Comprehensive index starts in volume 5, page 2667. HU Jintao Hú Jǐntāo ​胡锦涛 b. 1942 President of China (2002– present) Hu Jintao is the current President of the Peo- of Guizhou Province (July 1985–November​­ 1988), and the ple’s Republic of China. During his two terms party secretary of the Tibet Autonomous Region (De- in office he has faced several crises, with vary- cember 1988–January​­ 1991). Currently Hu serves as presi- ing degrees of success. His handling of the dent of the PRC, as well as general secretary of CCP’s Central Committee, and chairman of the CCP’s Military 2008 Sichuan earthquake was initially praised Affairs Committee. for his break from previous government se- Since his succession to Jiang Zemin, Hu Jintao has crecy but later criticized outside China after taken an active role in developing China’s foreign rela- widespread media censorship of the event be- tions. The first developments were the introduction of came apparent. He has been very active in pro- the concepts “harmonious society” and “peaceful rise,” moting development at home and improving the latter of which was proposed in 2003 by Chairman foreign relations, notably with Taiwan. of the China Reform Forum Zheng Bijian. Peaceful rise, later termed the peaceful development path by Hu, was touted as a path of economic development that could raise “China’s population out of a state of underdevelopment” orn in Shanghai in December 1942, with ances- (Glaser & Medeiros 2007, 295) while working coopera- tral roots in Anhui Province, Hu Jintao gradu- tively with other countries to promote national security ated in 1965 from China’s Qinghua University, and world peace.
    [Show full text]
  • Market Socialism As a Distinct Socioeconomic Formation Internal to the Modern Mode of Production
    New Proposals: Journal of Marxism and Interdisciplinary Inquiry Vol. 5, No. 2 (May 2012) Pp. 20-50 Market Socialism as a Distinct Socioeconomic Formation Internal to the Modern Mode of Production Alberto Gabriele UNCTAD Francesco Schettino University of Rome ABSTRACT: This paper argues that, during the present historical period, only one mode of production is sustainable, which we call the modern mode of production. Nevertheless, there can be (both in theory and in practice) enough differences among the specific forms of modern mode of production prevailing in different countries to justify the identification of distinct socioeconomic formations, one of them being market socialism. In its present stage of evolution, market socialism in China and Vietnam allows for a rapid development of productive forces, but it is seriously flawed from other points of view. We argue that the development of a radically reformed and improved form of market social- ism is far from being an inevitable historical necessity, but constitutes a theoretically plausible and auspicable possibility. KEYWORDS: Marx, Marxism, Mode of Production, Socioeconomic Formation, Socialism, Communism, China, Vietnam Introduction o our view, the correct interpretation of the the most advanced mode of production, capitalism, presently existing market socialism system (MS) was still prevailing only in a few countries. Yet, Marx Tin China and Vietnam requires a new and partly confidently predicted that, thanks to its intrinsic modified utilization of one of Marx’s fundamental superiority and to its inbuilt tendency towards inces- categories, that of mode of production. According to sant expansion, capitalism would eventually embrace Marx, different Modes of Production (MPs) and dif- the whole world.
    [Show full text]
  • Thinking Outside of the One China Box How to Undo the Gordian Knot in the Cross-Strait Impasse?∗
    Thinking outside of the One China box How to undo the Gordian knot in the Cross-Strait impasse?∗ JYRKI KALLIO AND MIKAEL MATTLIN To be presented at the Inaugural Conference of the European Association of Taiwan Studies at The London School of Oriental and African Studies (SOAS), 17–18 April, 2004 This paper starts from the premise that the status quo between Taiwan and mainland China is not stable, and discusses the resulting pressures for the parties to change their policies accordingly. We suggest a solution to the stalemate in the form of a “confederation with Chinese characteristics”: a confederation in form but not in name, based on the unity of Zhonghua (Chinese civilization) having a concrete form in shared organs and symbols. Emphasis is put on the choices of Taiwan, as Taiwan appears to be moving towards final separation from the mainland, which, if formalized, would lead to war. The mainland accuses Chen Shui-bian of aiming at rewriting the constitution in 2006 and declaring formal independence in 2008. The legitimacy of the Communist regime is tied to reunification, whereas it is unrealistic to expect Taiwan, a state-like democracy, to accept direct rule by mainland China. The coming few years present a window of opportunity, but also potential for disaster. The key issue to the solution is the concept of One China, which there is no consensus of. There is an urgent need to create an interpretation of the concept which would meet the concerns of both parties internally as well as internationally. The proposed solution would strike a delicate balance guaranteeing the complete self-determination of Taiwan in a de facto confederation and elevating it to an equal position with the mainland, while creating an image of a unified China through the establishment of a formal “ceiling” structure, modeled after the British Commonwealth.
    [Show full text]
  • Socialist Political Economy with Chinese Characteristics in a New
    The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/2516-1652.htm Socialist Socialist political economy with political Chinese characteristics in a economy new era Yinxing Hong 259 Nanjing University, Nanjing, China Received 18 October 2020 Revised 18 October 2020 Abstract Accepted 18 October 2020 Purpose – The socialist political economy with Chinese characteristics reflects the characteristics of ushering into a new era, and the research object thereof shifts to productive forces. Emancipating and developing productive forces and achieving common prosperity become the main theme. Wealth supersedes value as the fundamental category of economic analysis. Design/methodology/approach – The theoretical system of socialist political economy with Chinese characteristics cannot proceed from transcendental theories but is problem-oriented. Leading problems involve development stages and research-level problems. Findings – The economic operation analysis is subject to the goal of optimal allocation of resources with micro-level analysis focused on efficiency and macro-level analysis focused on economic growth and macroeconomic stability also known as economic security. The economic development analysis explores the laws of development and related development concepts in compliance with laws of productive forces. The new development concepts i.e. the innovative coordinated green open and shared development drive the innovation of development theory in political economy. Originality/value – Accordingly, the political economy cannot study the system only, but also needs to study the problems of economic operation and economic development. Therefore, the theoretical system of the political economy tends to encompass three major parts, namely economic system, economic operation and economic development (including foreign economy).
    [Show full text]
  • China's Eleventh Five-Year Plan (2006–2010): from “Getting Rich
    Fan.fm Page 708 Tuesday, January 9, 2007 10:11 AM China’s Eleventh Five-Year Plan (2006–2010): From “Getting Rich First” to “Common Prosperity” C. Cindy Fan1 Abstract: China’s Eleventh Five-Year Plan, which sets the directions for national develop- ment for the 2006 to 2010 period, has been described as a revolutionary plan. This paper examines the Plan’s goal to build a “harmonious socialist society” by enabling disadvantaged groups and less developed regions to share the fruits of economic growth. It first describes the Plan’s main principles and major quantitative targets for the five-year period. In the second half of the paper, the author argues that the emphasis on “common prosperity” can be explained by the rise in inequality over more than two decades, by a new political administra- tion that seeks to establish its own path while endorsing ideas from past regimes, and by Pres- ident Hu Jintao and Premier Wen Jiabao’s more open and consultative style of leadership. Journal of Economic Literature, Classification Numbers: O20, O53, P21. 1 figure, 2 tables, 58 references. Key words: China, Five-Year Plans, income inequality, regional development, common prosperity, sustainable development. INTRODUCTION n March 14, 2006, the Fourth Plenary Session of China’s Tenth National People’s OCongress formally ratified the country’s Eleventh Five-Year Plan, for the period 2006 to 2010. Since 1953, the People’s Republic of China (PRC) has implemented a series of Five- Year Plans that established the blueprint and targets for national economic development.2 In a country where the state continues to exert powerful control over much of the economy, the Five-Year Plans are key indicators of the directions and changes in development philosophy.
    [Show full text]